Google in Belarus Supports State Telecom Monopoly Against Fair Competition — and Its Own Principles

Google is defying its own foundational principles by supporting state monopolies over the Internet in some Eurasian countries. In Belarus, where Google services account for more than a third of the nation’s online traffic, the American company provides preferential treatment to Beltelecom, a state-owned monopolist Internet Service Provider, through the Google Global Cache (CGC) program. This has enabled Beltelecom, already a dominant player tied to the ruling regime, to strengthen its hold over the market, further dominating smaller private companies.

Google Global Cache partners with Internet Service Providers worldwide to place Google servers regionally. This network of nodes allows a significant percentage of requests to be served from a node located inside the service provider’s network serving local users. This optimization of traffic pathways increases performance as it places the content closer to the edge of the network. In Belarus, Google placed the monopoly over CGC in the hands of state-owned ISP Beltelecom.

Paper Principles

Google’s philosophy is founded upon ten basic principles or, in the company’s own words, “Ten things we know to be true.” Number eight — “The need for information crosses all borders” — affirms Google’s aspiration to provide equal and public access to information for everyone. This principle underlies some of the company’s more ambitious projects, such as Loon for All (a network of balloons traveling on the edge of space, designed to connect people in rural and remote areas) or Google Fiber (ensuring very high connection speeds). Moreover, Google co-founder and Alphabet President, Sergey Brin, has been known to accuse the competition, namely Facebook and Apple, of threatening Internet freedom by filtering content.

In reality, Google itself, when it serves the company’s interests, collaborates with state monopolies, creating discriminatory access to its services. In Belarus, only clients of the state-run Beltelecom enjoy the advantages of the Google Global Cache. For example, Beltelecom single-handedly decides whether private providers can access — and at what cost — Google’s special cache servers installed as part of the Google Global Cache initiative.

Cache or Cash?

The news of a YouTube cache-server installation in Belarus broke in January 2015. (YouTube is one of several Google-owned services.) The Google Global Cache locates some of its most in-demand services within local Internet Service Provider networks. This approach provides subscribers with fast and, in some cases, free content from Google. Operators save money on external traffic, which is always significantly more expensive than domestic. With the help of this project, Beltelecom, as the nation’s major operator, was planning to significantly lower its expenditures on external traffic — but went one step further.

YouTube cache-servers are installed at the Beltelecom’s data center. Private operators can access them—however, for the local connection Beltelecom charges them an international rate, as if the servers were located outside Belarus, such as in Germany or the United States. These costs are then inevitably passed down to the consumer in the cost of subscriptions.

Igor Sukach thinks that Beltelecom, with Google’s consent, essentially discriminates against clients of private ISPs. Sukach is the CEO of Atlant-Telecom (a competing privately-held ISP) and deputy head of Belinfocom (the Belarusian association of ICT organisations). According to Sukach, the US digital giant is complicit in Beltelecom’s selling of access to local servers and Google’s services at an inflated price:

“Google installed cache servers in Belarus not solely for Beltelecom subscribers, but for all Internet users. It makes sense that Google partnered with Beltelecom. What remains unclear is why Google did not discuss with the state operator under what conditions other players in the market could connect to the servers. As a result, Beltelecom allows commercial operators to connect to local YouTube cache serves — but at a price of a cross-border connection. De facto, Google servers enrich the monopolist.”

Tatyana Ignatovskaya, partner at the Stepanovsky, Papakul & Partners Law and member of the non-profit partnership Fostering Competitiveness in the Commonwealth of Independent States, says that Beltelecom abuses its dominant position in the telecom market. With a monopoly over cross-border communication channels, Beltelecom forces commercial providers to purchase dedicated lines at a price ten times higher than it charges its own clients. This threatens competition and is considered an abuse of a dominant position under respective Belarusian law, says Ignatovskaya.

And the Winner Is…

If Google’s regional servers were available to all operators or were part of the national peering system, it would significantly lower connection costs for commercial ISPs. Private operators would then likely lower their prices, or at the very least wouldn’t need to raise them during the ongoing economic crisis, thinks Igor Sukach.

Beltelecom isn’t quick to share the advantages of partaking in the Google Global Cache program. Besides Google, the state monopolist has profitable agreements with major Russian digital companies, such as Yandex, VK, and Mail.ru, all of which generate voluminous traffic. Monopoly over external channels allows Beltelecom to engage in predatory pricing, offering its clients much better options that commercial operators simply cannot afford to match. As a result, users of private ISPs find themselves at a substantial disadvantage when compared to Beltelecom clientele.

Attempts by commercial providers to negotiate a fairer arrangement directly with Beltelecom have not yielded any results; their query to Google to clarify the situation vis-à-vis its own founding principle has also been left without answer.

Tatyana Ignatovskaya thinks that operators could try to take their case to the court, but only as a collective action. “Everyone is saying that Beltelecom is abusing its dominant position, but there isn’t a single lawsuit against them. Until ISPs use legal mechanisms that the Belarusian law provides and their claims are recognized by the court, these allegations have no legal weight,” concludes Ignatovskaya.

Commercial providers, however, don’t plan to take the state operator to court, fearing they would altogether lose access to cross-border channels and whatever small discounts they were able to negotiate over the years. Commercial operators, with the exception of Atlant-Telecom, declined to publicly comment on the situation for this article. If previously their fate depended heavily on the domestic state monopolist, with Google’s entry into the Belarusian market, private ISPs find themselves with even less leverage to negotiate fair conditions for themselves and their clients. In the end, Beltelecom (with Google behind it) dictate the terms, which the competition and all consumers must accept.

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